Ayala Corporation: revenue barely grew, while debt added PHP 65.2 billion over the year

28 мая 2026 года Ayala Corporation раскрыла результаты за первый квартал 2026 года. Выручка выросла на 0,9% год к году, до 81 658,2 млн песо, чистая прибыль снизилась на 4,2%, до 17 030,8 млн песо. При этом долговая нагрузка остаётся высокой: отношение чистого долга к EBITDA за последние 12 месяцев составляет 11,01. Акции выглядят непривлекательно: модель портала оценивает потенциал роста в минус 8%, а дивидендная доходность в 1,9% не компенсирует риски.

Key takeaways

— Quarterly revenue barely changed, while EBITDA fell 1.3%

— Net profit dropped 4.2% due to higher interest expenses and impairment losses

— Debt rose by PHP 65.2 billion over the year to PHP 701.4 billion, with weak operating cash flow

— Quarterly operating cash flow was only PHP 2.7 billion, insufficient to cover capital expenditures

— Dividend yield of 1.9% is below the key rate, making the shares unattractive for income-oriented investors

— The portal's model estimates the shares' upside potential at minus 8%

— EBITDA margin fell from 20.7% to 20.2%, and net margin from 22.0% to 20.9%

Attractiveness

Key figures, PHP bn

Quarterly revenue barely changed, while EBITDA fell 1.3%

In the first quarter of 2026, Ayala Corporation's revenue reached PHP 81,658.2 million, only 0.9% above the year-ago figure. This is the minimal growth after a 21.4% drop in the fourth quarter of 2025, when revenue was PHP 255,809.6 million. The main contribution came from real estate and energy segments, but their growth was offset by weakness in other areas.

EBITDA for the quarter fell 1.3% year-on-year to PHP 16,499.0 million. The EBITDA margin narrowed from 20.7% to 20.2% — pressure came from operating expenses and revenue mix. This is the second consecutive quarter of margin decline, indicating stagnation in operational efficiency.

Net profit dropped 4.2% due to higher interest expenses and impairment losses

Net profit for the first quarter of 2026 was PHP 17,030.8 million, 4.2% lower than a year earlier. Interest and other financing charges rose from PHP 9,678.6 million to PHP 10,354.3 million, while impairment losses on equity investments reached PHP 1,223.2 million versus PHP 49.3 million last year. These factors outweighed growth in other income, including a remeasurement gain on previously held interest of PHP 1,814.5 million.

Net margin narrowed from 22.0% to 20.9%. The profit decline amid stagnant revenue points to a lack of operating leverage. Excluding one-off items, the drop would have been less pronounced, but the trend remains negative.

Debt rose by PHP 65.2 billion over the year to PHP 701.4 billion, with weak operating cash flow

Net debt at the end of March 2026 stood at PHP 701,415.4 million, up by PHP 65.2 billion over the trailing twelve months and by PHP 110.4 billion from the previous reporting date. The net debt to EBITDA ratio for the last twelve months is 11.01 — a high level that limits the company's financial flexibility.

Debt growth is occurring amid weak operating cash flow: for the quarter it was only PHP 2,673.4 million, well below capital expenditures of PHP 6,482.1 million. The company is forced to raise borrowings to finance investments, increasing its debt burden.

Quarterly operating cash flow was only PHP 2.7 billion, insufficient to cover capital expenditures

In the first quarter of 2026, Ayala Corporation's operating cash flow was PHP 2,673.4 million — the lowest level in the last four quarters, excluding the negative figure in the fourth quarter of 2024. Capital expenditures for the same period reached PHP 6,482.1 million, more than double the operating flow.

The shortfall is covered by new borrowings: net proceeds from debt amounted to PHP 23.1 billion (PHP 106.8 billion raised minus PHP 83.7 billion repaid). This confirms that the company is living on debt, and free cash flow remains negative.

Dividend yield of 1.9% is below the key rate, making the shares unattractive for income-oriented investors

Over the last twelve months, Ayala paid dividends of 1.9% of the current share price. This is significantly below the key rate, which remains double-digit amid high inflation. For an income-oriented investor, the conglomerate's shares are not attractive.

Payments for the past year amounted to PHP 749.96 million (dividends to owners of the parent company) for the first quarter of 2026, reflecting a conservative dividend policy. Given current profit and cash flow trends, an increase in payouts is unlikely.

The portal's model estimates the shares' upside potential at minus 8%

According to the portal's model, Ayala's fair value is 8% below the current market price. This means the market is already pricing in growth expectations that are not supported by fundamentals: revenue is stagnating, profitability is declining, and debt burden remains high.

The P/E ratio for the last twelve months is 3.54, which looks low but is explained by a significant share of intangible assets and investments in associates. EV/EBITDA is 15.97, higher than the average for emerging markets, but the company trades at a discount to its own historical levels.

EBITDA margin fell from 20.7% to 20.2%, and net margin from 22.0% to 20.9%

Margin decline has been observed for the second consecutive quarter. In the first quarter of 2026, EBITDA margin was 20.2% versus 20.7% a year earlier, and net margin was 20.9% versus 22.0%. This indicates that the company cannot fully pass on cost increases to consumers.

The main pressure factors were higher interest expenses and impairment losses, which eat into operating profit. If the trend persists, profitability could return to 2024 levels, when EBITDA margin was around 16%.

Valuation on the latest reported figures

Bottom line

The first-quarter 2026 report contains nothing that could change the negative picture: revenue is stagnating, net profit is declining, and debt continues to grow. The strong side remains business diversification and a low P/E, but weak operating cash flow and high debt burden outweigh these. A dividend yield of 1.9% does not attract investors, and the portal's model indicates a potential decline of 8%. The verdict is unattractive: at the current price, the shares do not compensate for the risks associated with debt and stagnation.